FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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3. Zena Technology sells arc computer printers for $55 per unit. Unit product costs are:

Direct materials                $14

 Direct labor                       20

Manufacturing overhead      3

Total                                   $37

A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced.

PLEASE NOTE: All dollar amounts, per unit and total, are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345).

When negotiating the price:

  1. What is the minimum selling price per unit that Zena should accept for this special order?  per unit.
  2. If accepted, what are the total sales? 
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